Why Tactics Trump Strategy

Michael Depner

Chess offers a longstanding tradition to draw guidance and principles for business. A prominent example is from Gary Kasparov’s book “How Life Imitates Chess.” However, the world champion sticks to one mainstream, oversimplified thought: Strategy is all—in chess and in business.

In this article, however, I would like to follow Richard Teichmann, a German chess master who lived about 100 years before Kasparov (1868-1925), who famously said, “Chess is 90% tactics.”

I agree with Kasparov that many chess principles can indeed be applied one-to-one in business situations, and the meaning of strategy and tactics are used the same way in both chess and business. I would like discuss why tactics matter in business—and why, when weighing tactics against strategy, strategy is sometimes overrated and tactics underestimated. And being in the software industry, I would add that this is especially true for the software business.

But first, let’s step back and look at how strategy and tactics are defined in Wikipedia:

  • “Strategy is a high-level plan to achieve one or more goals under conditions of uncertainty.”
  • “Tactic is a conceptual action aiming at the achievement of a goal.”

I would argue that the definition itself is the first reason strategy is rated higher than tactics. Strategy is the high-level plan, the long-term goal. It is, in a manner of speaking, the mother of everything.

Tactics follow strategy. Tactics appear to be the mere breakdown of the strategy into the short-term goals. Without strategy, there are no corresponding tactics, only execution of the corresponding masterplan.

But even if tactics are only execution (they are not, as I’ll describe later), execution does matter. Let’s go back to chess: You may have the perfect strategy, and you may have even gotten the execution right for most of the match. However, there is one caveat: suppose, after 50 perfect moves, you lose—despite a perfect strategy backing your game. That means that even a single flaw in the execution might turn the whole long-term plan into disaster.

Let’s consider two examples from the business world:

  • The de Havilland Comet: The de Havilland DH 106 Comet from the UK was the world’s first commercial jet airliner, and a prototype was first flown in 1949. The strategy behind this was great: The aircraft featured an innovative, aerodynamically clean design and a pressurized cabin. Given the era of its launch, it offered a relatively quiet, comfortable passenger cabin and was commercially promising at its debut in 1952. However, within a year, problems started to emerge. Three Comets were lost within twelve months, suffering highly publicized, catastrophic in-flight breakups. The reason involved seemingly insignificant flaws in the execution—for example, square windows that broke too easily. Though improved versions were built later, sales never fully recovered.
  • Rely: Rely was a brand of superabsorbent tampons made by Procter & Gamble starting in 1975. The innovative strategy behind this product was to use a new and unique superabsorbent material called carboxymethylcellulose, and compressed beads of polyester for absorption. This tampon design could absorb nearly twenty times its own weight in fluid. The company released the new product after having conducted extensive research on its safety. But there was a flaw in execution: Several cases indicated that Rely was linked to the dangerous toxic shock syndrome, and P&G was forced to withdraw the product in 1984, resulting in tremendous losses: several lawsuits estimated to cost several billion dollars, plus an estimated US $75 million for its withdrawal. Procter & Gamble was also left with no products in the $1 billion/year menstrual products market for some time.

This brings us back to the realm of software, where each and every line of code could contain that one disastrous flaw that could kill the underlying strategy. Very much like chess.

With so much tied to execution, all of this is naturally closely related to quality, which highlights the importance of “total-quality” initiatives. And yes, quality is indeed an important aspect of tactics.

However, tactics are not only about execution and quality. Tactics must also be creative, innovative, and disruptive.

Consider, for example, a globalization services organization in a major software company. The mission of the team is to empower businesses to remain locally compliant while competing globally. In particular, globalization services ensure that solutions are legally compliant with requirements such as tax handling. To achieve this, globalization services should build a reusable cloud platform, called a localization hub, across solutions and countries. The hub offers consumable services – such as a reusable tax calculator – and is open to partners and customers who want to co-innovate and co-build.

This is a truly disruptive strategy. But the strategy would not fly without accompanying tactics.

For example:

Marketing: As mentioned above, a platform invites customers and partners to co-innovate. But of course, customers and partners must know about this platform, and they need to know the advantages and benefits of this platform. This is classic marketing. However, both creativity and discipline are also required: Excellent tactics require that teams have the creativity to come up with innovative ideas and the discipline to follow through the complete catalog of activities end to end.

Handling the existing customer base: The innovator’s dilemma is a challenge for most software companies. In short, it says once they become successful, companies can no longer invest in innovation as their existing customer base demands the full attention of all available resources. One way to overcome the innovator’s dilemma is to create tactics that automate existing processes and use freed-up resources to invest in the future. Practice shows that every year, between 5% and 10% of previously busy resources can then be leveraged for innovation. Note that tactics in this context are not merely a savings execution—they need to be creative enough, for example, to overhaul the technical software delivery system and automate software logistics.

Tactics comprise not only strategy execution (which is important in itself). Tactics must proactively innovate to support strategy and flexibly respond to all unknowns that could challenge your strategy.

With this advocacy for tactics, at the end of the day, I would like to trigger more rewards and credit for those of you who deliver the tactics to make a strategy and a company successful, especially in the software world.

Don’t get me wrong: As I mentioned initially, strategy must be there in the first place, and it must be good and have great visionaries to create a lasting and successful outcome. Strategy and tactics must come together and live in symbiosis. However, we often see that the reward goes to the strategists or the visionaries, despite their risks and workloads being significantly lower. Who notices when a strategy fails? With long-term ambitions, many stakeholders change path. And of course, you’ve probably heard this before: “The strategy was great, but the execution … ”

For those in tactics, every step can and will be assessed and failure detected immediately, but with almost no reward. For those in strategy, there is hardly any assessment, but the reward is almost certain. Which would you choose? It’s no surprise that some people are cautious when it comes to too much strategy and vision. As the former Chancellor of Germany Helmut Schmidt responded when asked for his vision: “Whoever has visions should go to a doctor.”

Kudos to the tactician!

One question remains: If 90% are tactics, what is the other 10%? Only strategy? Or also luck (yes, there is luck in chess)? Values?

I hope to answer this quesion in my next article, which explores the quote of another chess grandmaster, Savielly Tartakower: “A chess game is divided into three stages: the first, when you hope you have the advantage, the second when you believe you have an advantage, and the third… when you know you’re going to lose!”

Michael Depner

About Michael Depner

Michael is Vice President and Head of Globalization Product Management at SAP Globalization Services in Germany, with over twenty-five years of professional experience. He began his career at SAP as a developer and later headed various international teams, being responsible for adapting SAP solutions to different locations and markets. In particular, Michael headed SAP development locations in Germany, India and Brazil, managing organizational growth while ensuring constant high quality of development output. In parallel, he introduced companywide processes to ensure SAP developments follow a so-called Globalization Standard. With this, SAP customers can benefit from SAP solutions globally.